India, US resolve food security row to end WTO impasse

Moving closer to end the log jam at WTO over the signing of Trade Facilitation Agreement (TFA), India and the US successfully resolved their differences on the issue of public stockholding for food security purposes. According to the agreement, the US will support India's proposal at WTO that 'peace clause', crucial for uninterrupted implementation of India's food security programme, should continue indefinitely till a permanent solution is found. The agreement will enable India to continue procurement and stocking of foodgrain for distribution to poor under its food security programme without attracting any kind of action from WTO members even if it breaches the 10 per cent subsidy cap as prescribed by the multilateral trade body. The agreement comes two days ahead of the G-20 Summit in Australia, which will be attended by Prime Minister Narendra Modi and other world leaders including the US President Barack Obama. WTO related matters are likely to come up during discussion between world leaders. Earlier, in July 2014, India had made it clear to WTO that it would not agree to the Trade Facilitation Agreement (TFA) unless there is a permanent solution on safeguards to run food security programmes. The WTO’s Ministerial Conference at Bali last December had provided for only a four-year “peace clause” during which no member country would be legally barred from implementing food security programmes even if the farm subsidies breached the caps imposed by the original Agreement on Agriculture (AoA). India had, however, rejected the temporary peace clause and insisted on its right to provide unlimited subsidies until a “permanent solution” to the issue was found. This stance attracted strong criticism, especially from developed countries including the US, the EU and Australia.